Stepping out of the shadow? The nature and durability of new firm formation in former coalfield communities

Abstract

One of the most contentious issues in regional development is the reasons for the persistence of spatial variations in new firm formation. Drawing on a unique dataset from the UK’s single largest entrepreneurship initiative scheme, we add to this extant literature by examining the nature of entrepreneurship in former UK coal mining communities which have been blighted by the process of industrial restructuring during the 1980s and 1990s. Our findings are simultaneously intuitive and counterintuitive: former coal mining locations have lower levels of start-ups, feature higher levels of entrants from the unemployment but are more likely to survive compared with start-ups in other locations. Additionally, we examined other associated factors potentially driving start-up rates. Here, we found that the presence of closely related industries and higher high-tech start-up rates were important in raising start-counts, but in-migration had the opposite effect. Given our reported findings around unemployment and hazard rates in the programme examined, modifications to this policy initiative seem appropriate. We conclude that the socio-economic ‘shadow’ cast by a location’s past appears to be a deeply and temporally enduring legacy of the mining industry which fundamentally shapes future patterns of regional entrepreneurship.